Recently, the micro-grid term has become a vital topic concerning with small power systems which depend highly on renewable energy sources. Mode transition in the micro-grid is a crucial issue which requires an urgent consideration. In this paper, the mode transition cases from grid-tied mode to autonomous mode and vice versa are analyzed, and a new method for a smooth transition from grid-tied mode to autonomous mode is proposed. Whereas for reverse transition (from autonomous to grid-tied), an improved pre-synchronization method for droop control stage has been applied. A hybrid battery/diesel combination is presented here as a master combination for the micro-grid. By default, the battery is the master unit, while the diesel generator has to be in charge as a master unit only when the state of charge (SOC) for the battery reaches the critical limit. The transfer between both master units is also addressed and a proper methodology has been employed to keep the synchronizing quantities (voltage, frequency and phase angle) within the permissible limits. The results of the simulation showed the validity and the efficiency of the presented work.